Legal Briefing: Actions Taken on Arbitration Agreements

In recent decisions, National Labor Relations Board law judges have issued decisions that employers unlawfully interfered with employees’ rights in compelling workers to sign mandatory arbitration agreements that waived rights to resolve employment disputes through collective or class actions.

These decisions conclude that employers unlawfully interfered with the employees’ exercise of seven rights to engage in protected concerted activity.

In each, the board’s administrative law judges recommend that employers cease and desist from maintaining binding arbitration agreements that waive rights of employees, and rescind or revise arbitration agreements to make clear to employees that the agreement does not constitute a waiver of their right to maintain employment-related collective or class actions. See JP Morgan Chase & Co., NLRB ALJ, No. 2-CA-088471, (Aug. 21, 2013); Cellular Sales of Missouri, NLRB ALJ, No. 14-CA-094714, (Aug. 19, 2013); and Everglades College Inc., NLRB ALJ, No. 12-CA-096026, (Aug. 14, 2013).  

Impact: Arbitration agreements are often required of employees. Even in the nonunion setting, legal challenges to such agreements remain unresolved.